Netflix Testing Ads? CEO Says No, Consumers Disagree
Pre-roll trailers for other Netflix content have some users fearful of ads to follow.
Some Netflix subscribers have reported seeing pre-roll ads before their content starts playing, and they’re not happy about it. The subscription video-on-demand library has always been ad-free, and that’s part of what has justified the monthly fee that subscribers pay for the service. Users are right to be fearful that the online video giant, which often aspired to serve as a replacement for cable TV, could become a bit more like cable TV itself: notorious for an absolute glut of advertising despite an ever-skyrocketing subscription fee.
Amid backlash as word of the ads spread, Netflix CEO Reed Hastings attempted to calm subscribers, assuring them that the SVOD library was not about to become awash in ads. Or at least not third party ads. What users have been seeing before their videos, are trailers for other content on Netflix. Despite this clarification, many users see no distinction between an ad and being forced to sit through an unwanted trailer, arguing that it is essentially still an ad, even though it happens to be an ad for something else on Netflix. And while the CEO has promised that third party ads are off the table, they’re no longer such a farfetched idea now that first party ads seem to be acceptable. As pressure builds on the streaming video company to increase revenues, Netflix and their customers may face a bitter choice between price increases or advertising creeping in.
They may not be happy about it, but the pay-TV business model has already proven that consumers will put up with advertising, even while paying to be able to watch. Several competitors demonstrate this as well: Hulu Plus has ads, and CBS has expressed openness to the possibility. CBS and HBO both currently display ads for their own content, similar to what Netflix has begun doing. Point to point streaming on such a large scale can get expensive, as can rights to programming necessary to keep a large and “fresh” library of content for users. As Netflix continues to grow, both domestically and abroad, the company will no doubt keep its options open for maintaining profitability.